No, I'm not talking about the blood of bankers spilling onto Wall St...
Rather, I am talking about the nefarious and ought-to-be-illegal phenomena of private, members only equity transaction networks. These are private exchanges where the large buyand sell side firms are able to make huge volume transactions with total anonymity of price and volume and are under no requirement to disclose information for the benefit of the public.
So what?
Well, they divert liquidity away from the public exchanges, they are a refuge for manipulation, they make it harder for individual investors to perform accurate analysis and quite simply, they are oligopolistic in nature and shouldn't be allowed.
Does anyone know of any law suits being filed against these dark pools or how I can get some regulatory body to look into this?
Cheers
B
Scott Jefferies:anyone retarded enough to risk their money in an anonymous company that discloses zero information is more than welcome to in my opinion.
That was pretty much what I figured. The exact rules governing whether shareholders in a company can or cannot sell stocks, under what conditions and what information they are or are not required to disclose to other shareholders is, and should remain, part of that company's constitution. If you don't like the company's constitution then don't buy their stocks.
Companies that want to join public stock exchanges may be required to disclose certain informaion in order to participate in those exchanges and, once again, if you feel the rules of the exchange that a particular company trades on are insufficient in some way then just do your trading on another exchange (and buy the stocks of some other company, or don't buy stocks at all or form your own exchange if you think your rules are so wonderful).
But for gods sake, don't go pointing guns at people and trying to force them to do what you think is reasonable, without having being provoked by them in any way... i.e. do not go whining to the government (holders of afforementioned gun) looking for them to regulate what you think to be reasonable - thus precluding the possibility of the contracts that would otherwise have been freely entered into by other market participants who, apparently, do not share your concerns or your views and are happy to take the risks that you quite obviously are not.
baoinvestor:They are arbitrary divisions of people and the activities they can or cannot perform.
Personal preference is not arbitary!
People have the freedom of association. You wish to deny them that?
baoinvestor: To say I do not have a right to view the effect of trading activities on stock that I own is just silly basically
No, saying you have the right to spy on others because you own a stock is silly. Does my owning an ounce of gold give me the right to intrude into every transaction that my influence the price of gold? No.
You don't own the price of the stock, you own the stock itself. And good luck finding a willing buyer, or you're stuck with the stock.
Scott, thank you for your deep insight into retards. You are clearly an expert.
How is the fact that dark pools ARE regulations that effectively discriminate not the same as Govt. regulation? They own stock in the same compnay as I do but they are able to exclude me from information about price movements and demand and supply just because I'm not one of 'them'? My holdings suffer directly as a consequence of their actions - how is this liberty?
You guys go on about all regualtion irrespective as being bad but it was to a very large extent the de-regualtion of the markets that have landed us in the mess we are in. If it was required that banks check the income statements of applicants - just this alone - would have meant a reduction in the number and volume of bad debt we are in now.
Anyone who thinks that profit centred individuals/companies are best suited to regulate themselves are more than welcome to feed their kids with milk from China - go on, make them chug that un-regulated, free-market milk right down their throats. Afterwards, leave them alone in a room full of Chinese lead-painted toys. What could go wrong?? Surely those companies take self-regulation seriously?
I notice that no-one addressed the issue of the short-term with the long-term.
Wait... so what exactly is wrong with private exchanges of... anything? Should we make it public when you go grocery shopping?
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No, seriously, can someone explain? From what I understand, "dark liquidity" is the private buying and selling of stocks/shares. What is so bad about this? Should it be publicized when one buys apples, so that the entire market can know that you are affecting the supply and demand of apples?
From Business Week:
What It Means for Investors The proliferation of dark pools could have ripple effects beyond just block trading, says Lee at Aite Group. As long as they remain a niche market, they're probably of little consequence. But if the equities market becomes increasingly dark as more trading shifts to these platforms, while retail investors continue to see only the public portion of equity trading, it calls into question the actual meaning of public price quotes, Lee says. On a practical level, if retail investors get the price they think they'll get when they submit an order and they're happy about it, they probably wouldn't care what the actual reality of the marketplace is, he says. Regulators would care, however, regardless of whether individual investors have concerns. In fact, Reg NMS modified a 1997 regulation by lowering from 20% to 5% the ceiling on average daily volume of any given stock that ATSs are permitted to represent before being required to disclose information to the public market, Lee says. Cline believes that not only are dark pools ultimately a good thing for investors but that "to not take advantage of dark pools is failing to live up to the best execution mandate of Reg NMS."
The proliferation of dark pools could have ripple effects beyond just block trading, says Lee at Aite Group. As long as they remain a niche market, they're probably of little consequence. But if the equities market becomes increasingly dark as more trading shifts to these platforms, while retail investors continue to see only the public portion of equity trading, it calls into question the actual meaning of public price quotes, Lee says.
On a practical level, if retail investors get the price they think they'll get when they submit an order and they're happy about it, they probably wouldn't care what the actual reality of the marketplace is, he says.
Regulators would care, however, regardless of whether individual investors have concerns. In fact, Reg NMS modified a 1997 regulation by lowering from 20% to 5% the ceiling on average daily volume of any given stock that ATSs are permitted to represent before being required to disclose information to the public market, Lee says.
Cline believes that not only are dark pools ultimately a good thing for investors but that "to not take advantage of dark pools is failing to live up to the best execution mandate of Reg NMS."
baoinvestor: Scott, thank you for your deep insight into retards. You are clearly an expert. How is the fact that dark pools ARE regulations that effectively discriminate not the same as Govt. regulation? They own stock in the same compnay as I do but they are able to exclude me from information about price movements and demand and supply just because I'm not one of 'them'? My holdings suffer directly as a consequence of their actions - how is this liberty? You guys go on about all regualtion irrespective as being bad but it was to a very large extent the de-regualtion of the markets that have landed us in the mess we are in. If it was required that banks check the income statements of applicants - just this alone - would have meant a reduction in the number and volume of bad debt we are in now. Anyone who thinks that profit centred individuals/companies are best suited to regulate themselves are more than welcome to feed their kids with milk from China - go on, make them chug that un-regulated, free-market milk right down their throats. Afterwards, leave them alone in a room full of Chinese lead-painted toys. What could go wrong?? Surely those companies take self-regulation seriously? I notice that no-one addressed the issue of the short-term with the long-term.
Do you understand the free market...at all?
baoinvestor:How is the fact that dark pools ARE regulations that effectively discriminate not the same as Govt. regulation? They own stock in the same compnay as I do but they are able to exclude me from information about price movements and demand and supply just because I'm not one of 'them'? My holdings suffer directly as a consequence of their actions - how is this liberty?
The why did you bought stock of that company in the first place? If the companies don't provide enough information for you to make a rational decision you shouldn't invest in that company.
If people won't buy stock because of lack of information,companies are forced to reveal that information if they want to obtain capital that way.
baoinvestor:Anyone who thinks that profit centred individuals/companies are best suited to regulate themselves are more than welcome to feed their kids with milk from China - go on, make them chug that un-regulated, free-market milk right down their throats. Afterwards, leave them alone in a room full of Chinese lead-painted toys. What could go wrong?? Surely those companies take self-regulation seriously?
That's very relevant because China is a perfect example of Laissez-faire capitalism , right?
please expain how a market can be free with asymetric information based on arbitrary laws and 'clubs'. That's not free pal. If the Eurozone allows un-tariffed trade amongst its members but imposes a tariff on trade with the US amongst all its members then that's not free market either - BUT according to you 'free association' inherently means free everything else. How can this nonesense be so hard for people to see through? Are you so naive to think it's only the governement that can manipulate the markets?
Does the Apartheid in South Africa constitute a fair deal to you? Those whites were exercsiing their right to exercise their ignorance and superior military and repressive might against the blacks. So you're oK with that? What is difference between a clutch of companies exercising their ability to exclude the rest based on who they like and don't like?
Also, the businessweek article cited is very narrow minded. It's not just about execution price of an order, it's about monitoring price fluctuations accurately if you trade your stock positions - then even 5% dark pool distorts the market.
To future responders - please don't question my understadning of free markets and such, I've made a very good living with investments in all manner of instruments. I find that being a trader for a living has been the ultimate 'free' job in the world. I trade what I want, when I want, I keep my profits (after tax) and I'm solely responsible for the losses and their management. I don't boss anyone around and no-one bosses me - until these dark pools distrupt the clear price signals of demand and supply.
To the scenario of apples, if you're an apple farmer and a bunch of other apple farmers set up a club to manipulate the price of apples against you then yes, there should be full disclosure! Their actions are wrong and illegal and should be stopped. Markets will only clear when there is no manipulation of any kind.... damn, this is basic economics people, lose the religion and get with the thinking already.
Corporate Ghost -
it's not the company, it's the investment banks who own the stock and buy and sell amongst them. In the secondary market the company has no control of this. If you don't understand this then perhaps you need to read up on the topic before posting or giving advice.
No China is not a perfect example of anything other than evil. But, it is a good example of how silly the idea of no regulations are if people think that individuals will always do 'good' over bad if they can make more money being 'bad'.
baoinvestor: please expain how a market can be free with asymetric information based on arbitrary laws and 'clubs'. That's not free pal. If the Eurozone allows un-tariffed trade amongst its members but imposes a tariff on trade with the US amongst all its members then that's not free market either - BUT according to you 'free association' inherently means free everything else. How can this nonesense be so hard for people to see through? Are you so naive to think it's only the governement that can manipulate the markets? Does the Apartheid in South Africa constitute a fair deal to you? Those whites were exercsiing their right to exercise their ignorance and superior military and repressive might against the blacks. So you're oK with that? What is difference between a clutch of companies exercising their ability to exclude the rest based on who they like and don't like? Also, the businessweek article cited is very narrow minded. It's not just about execution price of an order, it's about monitoring price fluctuations accurately if you trade your stock positions - then even 5% dark pool distorts the market. To future responders - please don't question my understadning of free markets and such, I've made a very good living with investments in all manner of instruments. I find that being a trader for a living has been the ultimate 'free' job in the world. I trade what I want, when I want, I keep my profits (after tax) and I'm solely responsible for the losses and their management. I don't boss anyone around and no-one bosses me - until these dark pools distrupt the clear price signals of demand and supply. To the scenario of apples, if you're an apple farmer and a bunch of other apple farmers set up a club to manipulate the price of apples against you then yes, there should be full disclosure! Their actions are wrong and illegal and should be stopped. Markets will only clear when there is no manipulation of any kind.... damn, this is basic economics people, lose the religion and get with the thinking already.
Wow. You have a lot to learn about libertarianism.
well nibbler, given that there is no defined and agreed upon definition of Libertarianism I'd say so do you. However, if the opposite of Libertarian is Authoritarian then I would say individuals imposing thier will on others is more the latter than the former. If you disagree, heck, I couldn't care less anymore. I don't think anyone who has posted here has any idea of what dark pools actually are. It's nothing to do with the company, it's not a free association concept because membership is discriminatory and it has huge externalities towards those individuals who want to operate in the free markets - free from manipulation.
C'est fini.
Have the last word with some banal statement if you so wish.
baoinvestor:it's not the company, it's the investment banks who own the stock and buy and sell amongst them. In the secondary market the company has no control of this.
Irrelevant. Ultimately,the companies decide whether to issue their stock or not and the investors decide whether to invest their money in a certain company or not.
idiot. you are an idiot. Not because you disagree with me, but because you are obviously refusing to learn about the subject before you speak on it. Pure idiocy.
So, what you're saying is:
Someone has gotten an "unfair" advantage(done through cooperation, free association, and voluntary interaction), and that somehow justifies violence? You can use aggression because you believe that it benefits you?
Sorry, this is a libertarian board, utilitarianism is that way --->
Seriously,I don't understand what you are doing in a forum about libertarianism and the Austrian school when you obviously don't know anything about them.
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